Farmers and Philanthropists – Proposed tax incentives to stimulate food donations

The American Farm Bureau Federation (AFBF) is working to implement a tax code that would allow farmers to receive enhanced tax breaks for charitable donations.

The Good Samaritan Hunger Relief Tax Incentive Extension Act of 2009 was reintroduced by U.S. Sen. Dick Lugar, R-Ind., June 22 to promote charitable food contributions by American farmers and ranchers. The current bill is set to expire in December.

"Despite the wealth of our country, affordable food prices and ongoing government food assistance programs, some people still have difficulty purchasing food for a proper diet," said AFBF President Bob Stallman in a letter to Congress.

America’s recession is further encouraging the bill’s passage, as the nation’s food banks report a 30-percent increase in need.

Only farmers and ranchers who use the accrual method of accounting may benefit from incentives for charitable donations of food. Bill supporters believe that an amended tax system with increased deductions could incite farmers to offer more of their surplus product to Americans in need. According to the California Farm Bureau Federation, the bill proposal increases the valuation to full market value of the donation and makes this provision a permanent part of the Internal Revenue Code.

"It has been my experience that farmers generally make the donation of food out of their desire to support their communities and the less fortunate, and any enhanced deduction was not the primary motivation of such a contribution," said Jim Bates, Fowler Packing Co. chief of financial operations and committee chair of Community Food Bank in Fresno, California. "The legislation does make it easier for farmers to take such an enhanced deduction and will result in increased donations of food should the bill pass."

Stallman concurs with Bates’ sentiment and notes the established benevolence of America’s farming community but believes more opportunity exists, “Many more would donate if they were able to bear the costs of harvesting, processing and transportation.”

The bill currently resides with the Committee on Finance.

Farm Share, a nonprofit organization based in Florida, recovers food that has been rejected in the retail sector because of minor imperfections and delivers excess food to social-service agencies throughout the eastern U.S. The organization asserts that its efforts “saves the farmers the added expense of disposal fees and related labor costs. In addition, field productivity is increased, sales are potentially increased as a result of product exposure, and food is donated and distributed to needy people without interfering with normal marketing channels.”

Feeding America, a nationwide network of member food banks, is America’s leading domestic hunger-relief charity. The organization provides tax breaks to corporate partners and details how entities can become involved. AFBF is an industry advocate of this aid organization.

To learn more and to voice your opinion about the bill, visit http://www.opencongress.org/bill/111-s1313/actions_votes.

Would farmers respond to further tax breaks or is more motivation necessary? Should Congress consider similar legislation for other industry groups such as meatpacking companies and food processors and distributors? Should the federal government provide additional support to organizations such as Farm Share and Feeding America?